Kathmandu. The US has directly challenged Britain’s longstanding dominance in international shipping insurance, particularly in high-risk sea lanes such as the Strait of Hormuz.
In March 2026, the U.S. administration directed the U.S. International Development Finance Corporation (DFC) to establish a $20 billion government-funded reinsurance facility. The fund will cover hull cargo and political risk insurance for ships operating exclusively in the Persian Gulf region.
The new initiative aims to provide insurance services at a lower premium than the current market. In addition, the issue of providing U.S. Navy escorts to commercial vessels if the need arises is also being considered.
Meanwhile, Lloyds of London, which has led the global maritime and war risk insurance market for more than three centuries, has faced criticism in recent years. Market participants have accused the government of raising premiums and limiting coverage in response to rising security risks and attacks on commercial shipping.
The U.S. move is aimed at restoring confidence in international maritime trade, stabilizing energy supply routes and allocating a portion of insurance premiums to U.S.-backed entities. To achieve this goal, the company also plans to partner with insurance companies like Chubb Limited.
However, London-based Lloyds said it viewed the initiative positively and was ready to assist, stressing that it was a major player in the global war risk insurance market.
The arrival of new U.S. reinsurance facilities could drive some businesses away from London, industry analysts say. However, Lloyds is expected to retain a significant market share due to its strong network, experience and global presence.
However, analysts believe that the long-term impact of the initiative is still uncertain due to implementation challenges and coverage limitations.
